LAWRENCE SMALL, who became head of the Smithsonian after more than three decades as a banker, had occupied his new post only a short while when he agreed to speak before the institution's women's committee. Its members, mostly Washington women who raised money for the Smithsonian with an annual craft show, were eager to hear what the new man had to say about an institution they all admired.

Small--a tall man with the self-assurance of a well-to-do Ivy Leaguer--told the women that he planned to serve as the Smithsonian's chief executive until he turned 70 in 2011. That gave him a little over a decade in which he hoped to solve a host of problems that he described in blunt terms.

He said the research activities of the Smithsonian were disorganized--"nobody knows what's going on in science"--and ought to be refocused, retaining a few centers of excellence while allowing other disciplines to "die out."

The Smithsonian's vast collections (142 million objects) were "so ill-managed and so ill-conceived" that he urged the women's committee to consider supporting exhibits for the public rather than scientists who spent their time "classifying and storing a huge bone collection in the back rooms."

In short, he said, the Smithsonian was "musty"

and "shabby" and undergoing "a slow death."

The remarks, delivered in November 2000, were intended to sound reform-minded and to be heard only by those present. But someone typed up notes, and before long they were being passed from one Smithsonian office to another.

For many old hands it was a shock to hear their institution described in such terms. No other head of the Smithsonian had ever referred to the beloved "nation's attic" using phrases like "shabby" and "slow death."

It was further evidence that the new man would not be business as usual--and might be big trouble.

SMALL, ENTERING HIS THIRD YEAR AT THE SMITHSONIAN, has turned out to be a lightning rod. He has not encountered the culture warfare that engulfed the institution during the 1990s over an exhibit of the Enola Gay, the B-29 that dropped the atomic bomb on Hiroshima. But his handling of other issues has left behind a wake of bad press, curatorial revolt, congressional resistance, and donor alienation--topped off by a big decline in attendance since September 11 that has led to budgetary problems and layoffs.

Two big gifts to the National Museum of American History--from real-estate developer Kenneth E. Behring ($80 million) and Catherine B. Reynolds, a student-loan entrepreneur ($38 million)--were controversial. The gifts were among the largest in Small's effort to transform the Smithsonian into a magnet for high-rolling donors--an exemplar of how a public institution that gets much of its money from Congress can also tap private wealth. But they also showed how much conflict can arise over gifts when they come with strings attached. In early February the Reynolds gift blew up into a debacle when she withdrew it because of differences with the curators.

A second source of tension on Small's watch has involved restructuring of scientific research at the Smithsonian, which employs scientists at its museums on the Mall and at research facilities in Hawaii, Panama, Arizona, Florida, Virginia, and Maryland. Small's proposed closing of one of those--a 3,200-acre preserve in the Blue Ridge Mountains near Front Royal devoted to the study and reproduction of endangered species--brought a worldwide outpouring of anger from biologists and conservation groups as well as the Virginia congressional delegation. In the end, Small withdrew the proposal, though the center's fate awaits recommendations from a blue-ribbon commission.

As these episodes have played out, it has become apparent that the Smithsonian is in the throes of a culture clash. Small has imported a management style honed in the world of corporate banking to an institution dominated by the traditions and values of a university and government bureaucracy. This has made for months of warfare involving secretive decision-making, press leaks, an anonymous Web site, rumors, and accusations.

"Larry Small has come in here and broken some eggs," says one longtime Smithsonian curator. "But we'll have to see whether he can produce an omelet."

TRYING TO BALANCE THE BOOKS

CHOOSING A LEADER FOR THE SMITHSONIAN IS THE REsponsibility of its Board of Regents. The institution's size, its national visibility and drawing power, its long history, and its location in the heart of the nation's capital make its chief executive a major figure. The official title is secretary, and before Larry Small, only ten people had held the job in some 150 years.

The regents were forced to begin thinking about a new secretary in early 1999, as the date approached for the retirement of I. Michael Heyman. A former chancellor at the University of California at Berkeley, Heyman had become secretary in 1994 with the intention of staying only five years--a period in which he was credited with extricating the Smithsonian from the political problems surrounding the Enola Gay.

Details of the search for his successor were left to a small committee of regents led by Wesley Williams Jr.--a partner at Covington & Burling and a member of one of Washington's most prominent African-American families--with Howard Baker, the former Senate Republican leader, as cochair.

There was some difficulty interesting top candidates. James A. Johnson--onetime CEO of Fannie Mae, the DC-based finance company, and chairman of the Kennedy Center board of trustees--wasn't interested, nor was Ellen Futter, the head of the American Museum of Natural History in New York City, or Alison Richard, provost at Yale. Also in the running at one point was H. Patrick Swygert, the president of Howard University, who would have been the Smithsonian's first African-American secretary.

Larry Small--who had been president and chief operating officer at Fannie Mae, its second-ranking post, for eight years--already was known in Washington social circles. Wes Williams had become acquainted because his wife--Karen Hastie Williams, a Crowell & Moring attorney--had long been a member of the Fannie Mae board.

At one point, Williams went to see Small at his office and asked if he'd be a candidate for the secretary's job. Small declined, preferring to stick with a plan to retire from Fannie Mae in a year or so at the age of 60 to pursue personal interests. He did agree to meet with the search committee to talk about what sort of management skills they might look for.

A few months later, Williams approached Small again. "Wes came back," Small remembers, "and said they'd been through a whole pile of candidates and would really like me to take this seriously."

Small asked Franklin Raines, Fannie Mae's chief executive officer and one of Williams's close friends, to call Williams and gauge whether the Smithsonian's interest really was that strong. The answer was yes.

SMALL WAS A NEW YORKER, A JEWISH KID WHO LIVED IN an apartment near Yankee Stadium until he was six, when his family moved to suburban New Rochelle. He went to a public high school, where he played goalie on the hockey team. His mother was an administrator at a public high school in the Bronx and his father an architect whose jobs had included building of the Strategic Air Command base in Greenland; he died when Larry was 15, and his mother later married a man who was a stockbroker and abstract painter. Blessed with a quick mind, Small went to Brown University, where he graduated Phi Beta Kappa in Spanish literature before beginning a career in business.

The business experience was one of Small's attractions for Wes Williams and other members of the search committee. He had spent his career in banking, rising to a high-level job at New York-based Citibank, where he spent 27 years, and then at Fannie Mae--both large-scale organizations where management was approached scientifically and with great seriousness. For several years there had been sentiment among some regents that this was the sort of skill the Smithsonian--which now had 16 museums and 6,300 employees--badly needed.

Small also was seen as someone who would be aggressive in raising money from private sources, which was becoming a high priority at all cultural institutions. He didn't have as much experience as Mike Heyman, who had raised $600 million at Berkeley and gotten the Smithsonian's fundraising off the ground, but he'd raised money as a member of nonprofit boards. Those included several in New York City--Mount Sinai-NYU Medical Center, the Spanish Repertory Theatre, the Joffrey Ballet, and the Collegiate School--as well as his alma mater, Brown University, and Morehouse College in Atlanta. In Washington he was on the board of the US Holocaust Memorial Museum and of the National Building Museum.

Small got bonus points from the search committee because of his cultural bent, which offered evidence that he was not, as one regent put it, "a mere businessman."

He was fluent in Spanish and Portuguese and played classical flamenco guitar, a passion that dated from his days at Brown, when he had been inspired by a Carlos Montoya recording. He had started his career with Citibank in Chile--that's where he'd met a young American woman whom he married--and they had enjoyed a lifetime of traveling throughout the world. Larry and Sandra Small owned a collection of folk art from the Amazon region of Brazil, so much of it that they had bought a spacious apartment in Northwest DC, not far from their home, to convert into a private museum that's been featured in Architectural Digest. He also was an avid bicyclist, windsurfer, and sailor.

Besides the fact that he had no work experience in a museum, there were holes in Small's résumé that his antagonists would later seize on. He had limited political experience of the sort that helped in dealing with Congress. Though his corporate jobs at Citibank and Fannie Mae were high-level, they focused mostly on internal operations, and he had never been promoted to CEO. He also represented a break in Smithsonian tradition that had lasted almost since its founding: Every one of his predecessors had been a scientist with the exception of Mike Heyman, a law professor and university administrator.

This last point appeared to give the regents little pause, and for some it increased their enthusiasm--a hard-nosed businessman, rather than some dreamy academic, was what the Smithsonian needed. "When you are interviewing," remembers one regent, "someone will come into the room and you say, 'This is the guy.' We all liked Larry and thought he would make an aggressive and attractive secretary."

In September 1999, the regents elected Small as the 11th secretary. He would be paid $330,000 a year, far less than the $4.2 million he had earned the year before at Fannie Mae.

WHAT THE BUSINESSMAN FOUND

THE CASTLE, A ROMANESQUE BUILDING erected of red sandstone in 1855 to the design of James Renwick Jr., was the first Smithsonian building and remains its symbolic heart. It serves as the orientation center for a museum complex that attracts about 30 million visitors each year to see such attractions as the Hope diamond and Charles Lindbergh's Spirit of St. Louis.

The Castle also contains a small room displaying the crypt of James Smithson, the Englishman who bequeathed his fortune to the United States government in the early 19th century to found an institution in Washington for the "increase and diffusion of knowledge." And the Castle is the Smithsonian's administrative center, with Larry Small's suite of offices on the second floor, where the first secretary, the eminent physicist Joseph Henry, once lived with his family.

The institution Small was asked to administer had gone through a couple of big spurts of museum-building. The first, from the 1880s through the 1920s, had brought the addition of the Arts and Industries Building, the National Zoo, the National Museum of Natural History, and the Freer Gallery of Art. The second, from the 1960s through the 1980s, saw the creation of the National Museum of American History, the Hirshhorn Museum and Sculpture Garden, the National Air and Space Museum, the Arthur M. Sackler Gallery, and the National Museum of African Art as well as off-the-Mall sites for the American Art Museum, the National Portrait Gallery, and the Renwick--most of these the work of the indefatigable ornithologist S. Dillon Ripley. By the time Small arrived, the Smithsonian had nearly five times as many employees as in 1960.

Two more museums were about to be built. Each had experienced higher costs than anticipated, requiring Small to raise millions more in private gifts. One of them, on the south side of the Mall at the foot of Capitol Hill, would be devoted to Native Americans. The other, on the grounds of Dulles International Airport, would show off aircraft that couldn't be accommodated at the original Air and Space Museum. There also were top-to-bottom renovations planned for the Old Patent Office, a building at Eighth and F streets that was begun in 1836 and now houses the American Art Museum and the Portrait Gallery. Other renovations were planned for the American History Museum, the Arts and Industries Building, the Castle, and the zoo.

Small was taking charge of an institution whose scattered museums and scientific units had been operated in a decentralized fashion. Their directors enjoyed considerable autonomy. They ran their own shows, working with their staffs to set research agendas, to mount exhibitions, to handle public relations, and to raise private money--that's what made being a museum director at the Smithsonian such an attractive job. The Castle's medieval appearance was apt, it was said, because the Smithsonian was a confederation of fiefdoms, with a unifying king at the top, but one who respected the prerogatives of the lords below.

An even better analogy is that the Smithsonian resembled a public research university. Mike Heyman often compared it with UC Berkeley, where much power was vested in independent-minded deans, department heads, and professors. Academic traditions and values were pervasive among the Smithsonian's curators and scholars. It was no accident that Dillon Ripley often referred to the Smithsonian "faculty."

Most of the scholars have PhDs, are organized into departments run in a collegial fashion, publish in peer-reviewed academic journals, and have made their reputations in specialized fields: botany, cultural anthropology, art history, biology, the history of technology, and dozens of others. Academic freedom--the idea that truth-seeking flourishes when scholars are allowed to pursue their work as they please--is held sacred among the curators.

The Smithsonian also resembles a university in some of the social and political issues it faces, all the more because it is such a high-profile interpreter of American national identity. For years, minority groups have sought a place in the Smithsonian--an effort that has led to more appointments to the Board of Regents and to their presence in more exhibitions and other programs. The exhibits in the new National Museum of the American Indian are intended to express an Indian point of view, and there's now a center that ties together Latino programs throughout the institution. Some in Congress had long sought the creation of a separate museum on the Mall devoted to African-American history and culture, an idea under study by a commission created by Congress. Some of this is controversial, encouraged on the left as overdue while disdained on the right as interest-group pandering.

Beyond that, the Smithsonian is monitored by conservatives for fear that its academically trained curators will put on exhibitions filled with left-leaning revisionist interpretations of American history and culture. The Enola Gay exhibit at Air and Space had been the nastiest battle, finally being revised at Mike Heyman's insistence after veterans groups and members of Congress protested that curators were using it to condemn the decision to drop the atomic bomb. Another firestorm surrounded an exhibition in 1991 at the American Art Museum, which suggested that many of the great paintings of the American West were veiled justifications for genocide of the American Indians.

LARRY SMALL'S PRIORITIES

IN THE FOUR MONTHS BETWEEN HIS selection and his inauguration, Small went about schooling himself on the Smithsonian. He met with about 80 people, including its museum directors, often in his office at Fannie Mae headquarters on DC's Wisconsin Avenue. He had lunch or dinner several times with Mike Heyman, who gave him advice, insights, and stacks of reports. Though he already had visited most Smithsonian museums, he made the rounds again, asking lots of questions.

After moving into his office in the Castle in January 2000, Small earned a reputation as a hard worker, frequently dispatching e-mails into the night. He also began assembling a management team. There were a few holdovers from Heyman's era, but many newcomers who had little or no museum experience. A top job in finance went to an executive Small had worked with at Citibank, and other jobs were filled by people with backgrounds in management consulting, marketing, and politics. The best known was Sheila Burke, once chief of staff to former Senate majority leader Bob Dole, whom Small knew because both were on the board of the Chubb insurance company. She'd been commuting to Boston, where she was a dean at Harvard's Kennedy School of Government, and jumped at the chance to return to Washington to be an undersecretary in charge of a cluster of museums dealing with American history and culture.

Small began to envision and promote his priorities, which he summed up in two words: modernization and money. "I want to modernize everything of consequence in the Smithsonian," he said, "and it'll take a lot of that second M to make the first M happen." It would cost tens of millions in computers and software, for example, to bring basic management systems up to date.

Repairs were needed on many of the Smithsonian's 400 buildings, which were plagued by peeling paint, dripping water, and falling plaster. Many were old, some dating to the 19th century. They were not configured for modern needs, and they'd taken a pounding from so many visitors. Small, who lives not far from the zoo in a $1.7-million mansion in Woodley Park, was appalled at the age and condition of places like the Elephant House, which was finished in 1937. "At the National Air and Space Museum we have a quarter-million square feet of carpeting," he said at a press briefing, "and probably a hundred thousand square feet of chewing gum on it."

Since 1995, Congress had added about $50 million a year to the Smithsonian's budget to meet renovation needs. The gleaming Freer was among the results. But it seemed clear that more was needed--as much as $1.5 billion over the next decade, according to one study.

Small also thought that many of the Smithsonian's permanent exhibits were outdated. At its four most-visited facilities--American History, Natural History, Air and Space, and the Zoo--nearly half of the exhibits were 15 years old or more. You had only to walk through some of the older regions of Natural History devoted to anthropology, where the baskets, pottery, and other artifacts are sealed up in glass cases, to see the problem. The public--especially young people reared on television, Disney theme parks, and the Internet--had come to expect exhibits that used video, interactive computers, and colorful graphics. Small thought the Smithsonian was way behind.

Redoing the exhibits would cost millions more that would have to be raised from private sources. One of the first projects Small took on was getting a new pair of giant pandas for the zoo to replace the deceased Ling-Ling and Hsing-Hsing. The zoo's director, Michael Robinson, did not want to replace the pandas, preferring to concentrate on smaller creatures and leave the few remaining pandas in the wild.

Small thought this was absurd. Everywhere he went, people kept asking him when Washington would get new pandas, and he became convinced that their box-office appeal was essential to boosting the zoo's attendance.

Small put panda acquisition near the top of his list and launched a fundraising effort. In the end, the two pandas cost $18 million--$1 million a year for ten years to preserve panda habitat in China and the rest for research and building a new panda enclosure at the zoo. The biggest gift was almost $8 million from Fujifilm, which got its name on the enclosure and a monopoly on film sales throughout the Smithsonian's gift shops. Bethesda-based Discovery Communications pledged $5 million, getting the rights to do behind-the-scenes filming for its Animal Planet network. FedEx agreed to fly the pandas from China to Washington in exchange for the publicity. Small, who had been on the boards of both Marriott International and the Chubb Corporation, used his contacts to extract major contributions from Chubb and a couple of Marriott family foundations. And another big gift came from Roger and Vicki Sant; he is cofounder of the Arlington-based AES global energy company and a board member of the World Wildlife Fund.

When the pandas--Mei Xiang and Tian Tian--arrived in December 2000, Small was ecstatic, comparing them to Fred Astaire and Ginger Rogers. In their first year they attracted more than 2.5 million visitors, and sales of food and gifts, including lots of panda souvenirs, increased by $3.7 million.

Increasing attendance at the museums in Washington became one of Small's top priorities. "There should always be lines waiting to get into every museum," he said.

He also intended to place greater emphasis on extending the Smithsonian's reach, to get its name and collections out into the rest of the country. Several such efforts already existed: two national magazines (Smithsonian and Air & Space), a Web site that attracted 19 million hits a year, and an affiliations program that allowed smaller museums to get loans of Smithsonian objects.

These affiliations with smaller museums, initiated by Mike Heyman, became one of Small's pet projects, increasing to nearly 100 during his first two years, including such places as Mount Vernon, the B&O railroad museum in Baltimore, a mining museum in Arizona, and a jazz museum in Kansas City. Small saw these affiliations as an opportunity to get more of the Smithsonian's artifacts out of storage to where they could be seen by the public, with the added benefit of gaining political support on Capitol Hill by getting the Smithsonian name into the home turf of more senators and congressmen. There were critics among the curators who thought that affiliations were a form of "franchising" and that some of them cheapened the Smithsonian name by allowing second-tier regional museums--as well as museums just being organized--to trade on its national reputation.

Small also set a five-year goal of doubling the net income from the Smithsonian's "business ventures." Like other museums, it already engaged in activities having little to do with its basic cultural mission. It ran two IMAX theaters, half a dozen restaurants and snack bars (with a McDonald's coming soon to Air and Space), 15 gift shops, a mail-order catalog, and an online shopping site. It also had relationships with cable-television networks (Animal Planet and the History Channel) and a shopping-mall retailer (the Museum Company).

Because profits from these ventures were unrestricted by the dictates of Congress or donors, they were the most flexible source of money at Small's disposal. But they were also vulnerable to economic downturns. When the number of visitors to museums on the Mall dropped 40 percent in the aftermath of September 11, the Smithsonian's gift shops, restaurants, and theaters took a big hit. The business-ventures division lowered its annual projection of net income from $25 to $16 million and laid off 11 percent of its workforce. About 50 employees in other units were laid off a few weeks ago, and the Smithsonian Web site has put up an "urgent" fundraising plea from Small warning of the cancellation of exhibitions.

END OF THE HONEYMOON

ROGER KENNEDY, DIRECTOR OF THE Museum of American History in the 1980s, tells a story about advice he once got about the pitfalls that can await anyone who takes on a management job at the Smithsonian. It came from McGeorge Bundy, who had been a Harvard dean, was known for his skill in dealing with strong-willed professors, and was aware that the Smithsonian was filled with curators of a similar cast of mind. "What-ever you do," Bundy said, "don't offend the faculty."

To do so would assure a short honeymoon--something Larry Small discovered after just a few months as secretary.

While some of the alienation between Small and the Smithsonian staff was linked to conflicts over donor relations and budget cuts, there were subtler tensions. Even some people who appreciated Small's attempts to raise lots of money didn't much like his style. He was a man of the private sector trying to run a public institution filled with academics who had little respect for the world of business. One yelled out to him during a heated meeting at the Natural History museum, "What do you know about science? You are a banker."

Some scientists, especially at Natural History, took offense at the critical tone of his remarks about the Smithsonian's shortcomings. The women's-committee speech was one example, but he repeated them enough in private meetings and elsewhere to leave the impression that his quest for reform was accompanied by a lack of respect for what some curators did. It was clear that Small did not subscribe to an old adage about the best way to change an organization--"begin by declaring everything perfect"--and before long he was paying a price for his undiplomatic speech.

Small's corporate way of going about things rubbed Smithsonian veterans the wrong way, especially those whose fondest memories were of the late Dillon Ripley. Even some of Small's language reflected what seemed like a sensibility alien to a cultural institution. One statement talked of an intention to "channel a portion of the institution's resources to areas where we see the potential for order-of-magnitude returns on investments." Academics had their jargon, but this wasn't it.

Small preached a version of scientific management that stressed setting "blisteringly clear" goals described "in excruciating detail," devising quantitative ways of measuring them, and periodically assessing in a hard-nosed way whether they were being met. He was not a man for squishiness: "I am a devout believer in quantitative measurement. In the end, if you can't figure out a way to hang a number on whatever it is you're trying to track, you will see that it is impossible to assess your degree of progress." This process, along with bringing in talented people, was at the core of good management, he said, and it was the same whether you were running a large corporation, a medical center, a university, or a museum complex.

He believed in counting everything--money, attendance, exhibitions, collections, personnel, facilities, schoolchildren served, scholarly publications, staff turnover, Web-site hits, potential donors visited, letters dispatched--an approach summed up in a speech called "You Are What You Track." It all made perfect sense to Small and those who believed in him, but it was not an approach applauded in the Smithsonian's ranks, where people rolled their eyes at every request from the Castle for more data and complained of "micromanagement" and "empty bean counting."

There was resentment about a perceived shift in power away from the individual museums toward Small and his cadre of managers in the Castle. It was true that Small held breakfasts for staff members in the Castle at least a couple of times a month, but they did little to counteract the impression that he did not readily listen to advice, made the big decisions at the top, and operated secretively without building consensus down the line. Some of the museum directors were flabbergasted at the extent of this new top-down arrangement, which one said reduced them to "trivial nonentities."

Small's emphasis on fundraising and attendance also aroused worry that the Smithsonian's tradition of serious scholarship was being eroded--a position expressed in a Washington Post article by Milo Beach, who resigned last October after heading the Freer and Sackler galleries of Oriental art for 14 years. Small's preference for "good administrators" over scholars as museum directors gave the impression, Beach said, that the secretary viewed "the life of the mind with astonishing indifference." Thomas Lentz, director of the Smithsonian division that includes the Freer and Sackler, responded in the Post that Beach was mistaken and that Small is committed to an "appropriate balance" of scholarship, public outreach, and fundraising.

THEN THERE WAS THE ANGER AMONG Smithsonian staff over the Castle's designs on "402 accounts"--a saga that illustrated how it's sometimes the small things that matter a lot. Dozens of these nonfederal financial accounts had existed for years, each a repository of a few thousand dollars accumulated by individual curators or museum administrators from giving speeches or through small-time fundraising. Like petty-cash funds, they came in handy, used for trips to scholarly meetings or special events.

A few months after Small arrived, a rumor spread that the Castle was going to take control of spending from these accounts--a demoralizing possibility that, in classic bureaucratic fashion, quickened attempts to spend them down. "I went out immediately," says one curator, "and bought a new office chair."

Eventually a memo from the Castle was circulated requiring everyone to submit a plan for spending 402 money in accordance with priorities enunciated by the new secretary, including more "public outreach." There was a lot of anger and grumbling about filling out the forms and some creativity in recasting one's original intentions to fit the secretary's plans. "My trip to an historical meeting qualified as public outreach to me," said one curator.

In the Castle, there apparently were second thoughts about the 402 maneuver. The Smithsonian's general counsel may have grown leery that some of the funds, acquired through gifts, had restricted purposes. So the idea melted away, leaving only a residue of ill will. "It was one of the stupidest things Small could have done," one observer said.

SMALL ALSO DEPARTED FROM SMITH-sonian traditions of curatorial independence by ordering up a new exhibit on the US presidency at the Museum of American History soon after he arrived. It was an unusual exhibit not only because the idea came straight from the Castle but because Small demanded that it be done in record time.

Curators often spent several years of research and reflection on their exhibits, moving on what one administrator calls "an evolutionary time scale." Small, accustomed to the quick pace of modern business, wanted the exhibit done fast, and he horrified some curators by telling them they could get the information they needed from an encyclopedia. Spencer Crew, the museum's director, was told to have it done in time for the 2001 inaugural--only about nine months away.

The exhibit, called "The American Presidency: A Glorious Burden," opened on time, and it has become, like the pandas, a promotional centerpiece of Small's administration. It features 900 objects, including George Washington's sword and scabbard, the lap desk Thomas Jefferson used to draft the Declaration of Independence, the top hat Abraham Lincoln wore the night of his assassination, and a radio microphone used by Franklin Roosevelt to deliver his fireside chats. It also has lots of video screens and interactive computer terminals.

It cost $12 million to produce--one of the most expensive exhibits ever--with all the money raised from private donors. The two biggest were Ken Behring ($4 million) and the History Channel ($1 million), whose names appear on a banner outside the museum in letters as big as the name of the exhibition itself. Though heavily promoted and regarded by Small as a prototype of the Smithsonian exhibit of the future, its reviews were mixed. There was praise for its artifacts and information but criticism that it was laid out in a confusing way and lacked intellectual depth.

RAISING REALLY BIG MONEY

THE SMITHSONIAN HAS ALWAYS BEEN a hybrid creature that gets its support from both public and private sources. Its original endowment from James Smithson and other gifts are held in trust funds, which are spent unencumbered by federal regulations. But the Smithsonian also gets about 70 percent of its operating budget--$519 million this year--from Congress, which is one reason it has always been reluctant to charge admission. The Board of Regents reflects this public-private nature, eight members being federal officials (including the Chief Justice, the Vice President, three senators, and three congressmen) and nine being private citizens.

Among the private citizens are people with backgrounds in law (Wesley Williams), business (Alan Spoon, former president of the Washington Post Company), politics (Barber Conable, a former New York congressman and former president of the World Bank), and university administration (Walter Massey, president of Morehouse College).

The Smithsonian operates under a tacit deal with Congress in which tax dollars support the overhead (salaries and upkeep on buildings), but money for exhibitions and other programs comes from earnings on its endowment, business ventures, and private gifts. Small seems satisfied with this arrangement and expresses confidence that it will continue. But there is some risk that more private fundraising might encourage Congress to provide less in appropriations. "It is important," said one observer, "to make sure that private money is a supplement to federal money and not a substitute."

There is no question that the Smithsonian is under pressure to raise more money from private sources. For many years its federal appropriation has been inadequate to cover inflation, mandatory raises for its employees, and other costs. It no longer has any federal money to do exhibitions, and a significant number of retiring staff members have not been replaced.

Congress is showing less inclination to finance new construction. It footed the bill for all of the original Air and Space Museum in 1976 but is paying for none of the new Air and Space center at Dulles.

The Smithsonian has rarely complained about the amount of money it gets from Congress, but there are those who think it is inadequate given the institution's cultural importance. Some insiders think the Smithsonian has not been aggressive enough on the Hill. "It's not all Larry Small's fault," says one. "He wouldn't have to make all these deals with donors if we got adequate money from Congress."

For most of its history, the Smithsonian did not operate a sophisticated fundraising operation like those found at major universities. Dillon Ripley had a knack for capturing great collections like those of Joseph Hirshhorn and Arthur Sackler, but gifts of cash remained quite low.

In the mid-1990s, this began to change as Mike Heyman beefed up the Smithsonian's pursuit of private donors. Regular fundraising began to grow--up from $51 million in 1995 to $215 million in 2001.

When Small took over from Heyman, many of the basics of fundraising remained the same. Corporations are one major source of gifts--though usually less than a fifth of the total--and they like to concentrate their money on high-profile exhibitions. Two of the biggest gifts were to the American History museum: $10 million from fashion designer Ralph Lauren and his Polo company for restoration of the flag that inspired "The Star-Spangled Banner" and $10 million from General Motors for a planned exhibition on the history of transportation.

Companies often use money from their marketing, rather than philanthropic, budgets for museum exhibitions, which is a clue that they see them as great image-building. While critics always worry that companies like GM will try to unduly influence the content of exhibitions, their strongest interest seems to be having their names and corporate logos displayed. The Smithsonian's practice of allowing companies to throw big parties in conjunction with exhibit openings is another big plus in a town with so many political VIPs to be lobbied.

But it's individuals--often acting through their own foundations--who have always provided the biggest share of the Smithsonian's private gifts. The number of such gifts rose, first under Heyman and then under Small, and some were big. Besides the gifts from Behring and Reynolds, it had scored three other gifts of $30 million or more: $65 million from Steven Udvar-Hazy, a Hungarian immigrant who made money in aircraft leasing, for the new Air and Space Museum at Dulles; $40 million from a foundation created by the late inventor Jerome Lemelson and his wife, Dorothy, for programs on invention at American History; and $30 million from a foundation based on the fortune of media owner Donald Reynolds to buy and exhibit a Gilbert Stuart portrait of George Washington at the Portrait Gallery.

The largest donors are noted on the walls of a room in the Castle across from James Smithson's crypt. Among the Washington donors are foundations associated with the Marriott and Cafritz families as well as such individuals as Katharine Graham, Max and Heidi Berry, Robert Lehrman, John and Adrienne Mars, John Safer, Roger and Vicki Sant, Paul Peck, and Ivan and Nina Selin. The Smithsonian has received about 140 donations of $1 million or more, but there are plenty of blank panels in the donor-appreciation room to be filled.

A crucial aspect of Small's fundraising strategy is to concentrate on donors capable of making huge gifts. He hopes, he has said, to attract several gifts of $60 to $75 million and some of $100 million or more. The reasoning seems to be that the Smithsonian needs so much money and the economy has generated so many megamillionaires that it makes sense, as fundraisers are fond of saying, to "pick the cherries and not the pits." It will be a perpetual campaign, Small says.

He clearly is after big fish. Ted Turner--the media mogul who raises buffalo on ranch land out west--gave $1 million several years ago to the new American Indian museum. But Small's pitch for a much bigger gift was rebuffed.

Fundraising occupies a lot of Small's time, and precise tallies are kept of the number of appointments he has with millionaire or billionaire prospects. In his first two years, these efforts have yielded just over $200 million a year for the Smithsonian, considererably more than before but less than is usually raised by the 20 or so most successful universities. Harvard, for example, normally raises between $400 and $500 million a year.

Reviews of Small's fundraising skills are mixed among those who work with him. They have been surprised that his Rolodex of contacts isn't bigger and that the Smithsonian so often resorts to cold callng and form letters. He's had difficulty recruiting someone to head the central development office. It also is said that he is sometimes impatient with the long and delicate process of cultivating prospects and has offended some by talking too much, listening too little, and asking for money too quickly. "Larry pitches too hard and too fast," says one donor.

One indication of Small's emphasis on fundraising is the decor he has installed in his office and surrounding rooms, one of which includes a table for intimate dinners with prospects. The whole suite is decorated with artifacts from each of the museums to illustrate the Smithsonian's encyclopedic reach. Take your pick of art (a Henry Moore sculpture), history (the Wright brothers' stopwatch), natural history (the skull of an African white rhino), pop culture (a Kermit the Frog puppet), and more.

KEN BEHRING'S $100 MILLION

KEN BEHRING IS A SHORT, HEAVYSET man in his early seventies whose knack for making money has taken him from a small town in Wisconsin to the suburbs of northern California. He dropped out of the University of Wisconsin, had his first success selling used cars out of a converted chicken coop, then headed to south Florida, where he began building houses. He built thousands there, then moved to California to build a luxurious gated community east of San Francisco. For a few years he owned the Seattle Seahawks franchise in the National Football League, which he sold for a $100-million gain to Microsoft cofounder Paul Allen.

He reached the Smithsonian's radar screen via Mike Heyman, who had known him in California when Behring had ties to UC Berkeley. Behring had reached the age where he was spending much of his time giving away some of the half a billion dollars or so that had once landed him on lists of richest Americans. He had taken pride in sending thousands of wheelchairs to the Third World, sometimes delivering them aboard a private jet the size of an airliner, and he was known as one of the country's most ambitious big-game trophy hunters.

For the Smithsonian it was a stroke of good luck that Behring had no alma mater to which he planned to leave his fortune. It could be argued--and the Smithsonian did--that Behring was an alumnus of America, the land of opportunity, and there was no place more appropriate to pay back his native land than its national museum.

Behring's first Smithsonian gift--$20 million in 1997 to Natural History--was used to renovate its soaring rotunda, where an African elephant has greeted visitors for years, as well as its mammal hall. Both were renamed in his honor. But the favorable publicity usually associated with such gifts was diminished, much to the Smithsonian's and Behring's chagrin, by negative press coverage associated with Behring's hunting hobby.

Behring, who competed with other wealthy members of the Safari Club International in the hunt for exotic species, had received a permit from the government of Kazakhstan to kill rare Kara Tau argali sheep. He later discovered he could not bring their carcasses back to the United States because the species was considered endangered. When the Smithsonian applied for a wavier to import Behring's sheep for use in scientific research, the Humane Society of the United States suggested there was a quid pro quo between a rich donor and a compliant beneficiary--something both parties denied.

The gift to Natural History occurred before Larry Small's arrival, but he soon began to see Behring as a prospect for something bigger. A proposal soliciting an additional $80-million gift to Natural History was prepared, complete with a picture of the museum with Behring's name on the front. But Behring was unhappy with the slow pace of the renovations funded by his first gift and wanted nothing more to do with Natural History.

But he did have an interest in giving to a different Smithsonian museum. "He saw that the American History museum could be far more than what it had been," says Small, who bypassed the administration at American History and took charge of cultivating Behring. "He could see that Air and Space and Natural History were drawing many millions more visitors in the same size of exhibition space."

Small pitched the idea of a huge gift as the catalyst for a top-to-bottom renovation of the American History museum, and Behring agreed. In September 2000, a gift of $80 million was announced, the largest cash donation ever to a Washington cultural institution.

Behring had a low opinion of much of what he saw at the American History museum. Too many exhibits focused on narrow subjects and too few on the sweep of American history. Too much emphasis on technology and social history--the mass migration of blacks from the South to the North, to cite one example--and too little on great American heroes like Lincoln and Jefferson. For Behring, a political conservative, some of it was too downbeat about the land that he loved.

Behring's gift means the museum will be completely changed in a few years. He arranged to have his own architect from California come up with ideas for the museum's physical reconstruction. He insisted on creation of a blue-ribbon commission to rethink its approach to American history--an ideologically balanced group now at work under the chairmanship of longtime Washington political hand Richard Darman. Most existing exhibits will be gone, though the big flag from Fort McHenry will remain, as will the new exhibit on the presidency and an older one featuring the gowns of the first ladies. The revamped museum also will have a big introductory exhibit establishing the timelines of American history, and Behring is getting a larger exhibit on the American military.

To many of the curators at American History, all of this amounted to an erosion of their traditional prerogatives. They were accustomed to conceiving and designing the exhibits with the help of outside scholars--relying on the administration to go out and raise the money from underwriters, who were expected to take their bows and not meddle.

Other complaints involved the amount of recognition that Behring received. He originally wanted the museum renamed in his honor, which would have required an act of Congress. Instead, at Larry Small's suggestion and with the endorsement of the regents, the subscript "Behring Center" was added to the museum's name and now shows up on everything from the entrances to the stationery.

Small was quick to point out that this was common practice in cultural institutions, that Behring was only an addition to the museum's name, and that naming a museum for a donor wasn't unprecedented. Three of the Smithsonian's art museums were named after their donors (Charles Freer, Arthur Sackler, and Joseph Hirshhorn). The regents had approved naming the new Air and Space Museum at Dulles in honor of Steven Udvar-Hazy, and James Smithson's original bequest required that the institution bear his name.

But there were traditionalists who didn't like offering donors "naming opportunities" in a public institution, thinking it smacked of selling off parts of the museum complex to the highest bidder. The criticism grew louder when someone leaked to the press an internal memo offering suggestions about parts of the institution that could be named in a donor's honor for a given amount of cash--from the Castle clock and a curatorship of the orchid collection to a butterfly pavilion and maintenance of the Smithson crypt.

CATHERINE AND MARTHA

THE SECOND BIG GIFT LARRY SMALL negotiated for the American History museum came from Catherine Reynolds, a woman who burst onto Washington's philanthropic and social scene in the late 1990s. Reynolds had grown up in Florida--her father was a career Navy enlisted man--and she had gone to Vanderbilt, where she majored in economics and business. By the late 1980s, she was in Washington on the ground floor of a startup company that used aggressive marketing to do billions of dollars a year in student loans. After the company was sold to Wells Fargo Bank in 2000, she created a private foundation with assets said to be as much as $500 million.

Such a pile of cash did not go unnoticed among fundraisers, and Mrs. Reynolds, who was building herself a mansion in McLean, was soon in the embrace of a long list of Washington institutions whose engraved invitations filled her mailbox. While a bit of her money went out of town or to organizations like Special Olympics, Reynolds was inclined to dole most of it out in Washington to high-glamour cultural institutions. The National Gallery of Art, the Washington Opera, Ford's Theatre, the Phillips Collection, the National Symphony Orchestra, and the Kennedy Center were among the beneficiaries. Last winter, at the age of 44 and just a dozen years after arriving here as an unknown, she was standing at the center of Washington's social stage. Dressed in the finest jewels and haute couture, she was chair of the NSO's prestigious annual ball and announcing a $10-million gift to the Kennedy Center.

Her biggest gift was the $38 million to the Smithsonian, which originated from a friendship with Ken Behring. Behring introduced Reynolds and Small, who took it from there and closed the deal. About $26 million was for a new permanent exhibit at the American History museum called "The Spirit of America," intended to celebrate Americans of achievement. The remaining $12 million was to endow an annual award to a noteworthy achiever.

The achievement theme--adopted by the Smithsonian as its own--bore a striking resemblance to ideas espoused by a tax-exempt organization called the American Academy of Achievement, run by Reynolds's husband, Wayne. His father, a former Life photographer, had started the organization in 1961, and Wayne had devoted much of his life to making something of it. In fact, Wayne had tried in the late 1980s to interest Ken Behring in helping finance a museum of achievement on the West Coast.

Though little known to the public, this academy has grown into an organization with links to a large network of accomplished and wealthy people. Each year the academy picks about 30 prominent figures from the arts, sports, the military, business, public service, entertainment, and the sciences and honors them with something called a Golden Plate Award.

The organization lists an address at a townhouse near Scott Circle, runs a Web site, and each year sponsors a four-day "salute to excellence," sometimes at a seaside or mountain resort, to bring the notables together to mingle and extol the importance of education, hard work, and determination in achieving success.

About 400 gifted teenagers are flown in for these "gathering of the greats" and given VIP treatment. All expenses are paid--including tuxedos for the boys and corsages for the girls at the main banquet--for a few days of entertainment and rubbing shoulders with the distinguished adults, who are dubbed "captains of achievement." Over the years the entertainment has included a fireworks display over Fort McHenry, a trip to the Grand Canyon, an aerial show by the Blue Angels, and concerts by Loretta Lynn, the Judds, Vince Gill, and Amy Grant.

EYEBROWS WERE RAISED OVER THE Reynolds gift almost from the moment Larry Small announced it at a lavish luncheon last spring in the Castle, which the donor herself paid for. While fundraising professionals are accustomed to high-maintenance donors with big egos, Reynolds seemed to surpass the standard in her desire for adulation and control. She handpicked most of the guests, brought in Patti Austin to sing "God Bless America," and hired Sheila Tate, former press secretary to Nancy Reagan, to drum up press coverage. There was a big turnout of dignitaries, some of whom had been honored by the American Academy of Achievement.

Reynolds enjoyed the limelight: "Wow, this is great fun!" she exclaimed when Small and the audience rose to give her an ovation.

Being new to the philanthropy game, Reynolds got herself into a public-relations bind with some comments to reporters. She said she intended to be a "hands-on" donor, implying that she had little respect for the traditional etiquette of writing a check and then leaving exhibition content to the museum. And she declared that she was modeling herself after the New York socialite and philanthropist Brooke Astor, which was interpreted as meaning that she saw philanthropy as a way of boosting her social status.

Worst of all, when asked who might be honored in her "hall of achievement," her list included Martha Stewart, Oprah Winfrey, Dorothy Hamill, and Sam Donaldson--all of whom struck museum historians and skeptical journalists as figures long on celebrity but short on historical heft. Nobody noticed at the time, but all had been honored by husband Wayne's American Academy of Achievement, which would be getting recognition in the new Smithsonian exhibit and had just weeks earlier delivered a Golden Plate Award to none other than Larry Small, who was sponsored for the award by none other than Ken Behring. Mrs. Reynolds also talked of honoring historic figures like Jonas Salk and Martin Luther King, but the Martha Stewart remark left the impression that the Smithsonian had agreed to create some sort of cheesy "hall of fame" for celebrities.

The contract between the Smithsonian and Reynolds gave her extraordinary say in the exhibition. She had the right to approve its location in the museum, its design, and the construction schedule. And she was given a major role in deciding which achievers would be featured, a procedure that involved a 15-member selection committee. The contract guaranteed her the right to nominate people for two-thirds of the committee's seats, with the other third nominated by the museum's staff--all subject to approval by the regents.

Allowing so much donor influence over an exhibit is unusual, and many have interpreted it as either a sign of the negotiating toughness of Wayne and Catherine Reynolds or a sign that Larry Small and Sheila Burke, who did the deal, were too eager for the $38 million or too inexperienced to know that it violated some of the protocols of cultural philanthropy. "Being a newcomer to such huge gifts, the Smithsonian just had no culture or experience in how to deal with an 800-pound gorilla," says one insider.

Among those most upset by the Reynolds gift were the museum's curators. All but two of 36 curators signed a letter of protest, which was echoed by other letters from associations of historians and museum administrators. Their point was that Small had given away the store, allowing Reynolds to acquire 10,000 square feet of valuable museum space for a pet idea without any input or evaluation by curators, the museum's director, or anybody who knew much about American history. It was a bad precedent, said the curators, that jeopardized their institution's integrity: "Will the Smithsonian Institution actually allow private funders to rent space in a public museum for the expression of private interests and personal views?"

Small defended the hall of achievement both as an antidote to curatorial "insularity" and for its brilliance--a project that would "inspire countless young people woefully in need of positive role models." But there were plenty of curators and others who continued to think it was lame.

This criticism angered Wayne and Catherine Reynolds, their friends, and Larry Small, who had seen Reynolds, with all her contacts, as a gateway to other high-capacity donors. One ominous development: Albert Lord--the CEO of Reston-based Sallie Mae, a Reynolds friend, and a patron and honoree of the American Academy of Achievement--is said to have held up a $20-million gift the Smithsonian thought was a sure thing.

Despite the bad feelings, museum staff members began working with Catherine and Wayne Reynolds to design the exhibition. But it became clear after several months that there was a philosophical chasm between the curators and the donors.

The Reynolds team was committed to the idea that history is a story of heroic individuals whose lives can be inspirational, especially for the young. While that is an approach shared by many citizens, it has long been out of fashion among historians, who distrust history as inspiration and often focus less on individuals and more on groups, institutions, movements, and impersonal historical forces.

In early February, the exhibition fell apart. Reynolds dispatched a letter to Larry Small telling him that irreconcilable differences with the museum had convinced her to withdraw most of the $38 million ($1.5 million had been paid at the beginning). The withdrawal came just as her contract with the Smithsonian would have required her to pay a $2.5-million installment.

Larry Small, who had cut the deal and celebrated it so loudly, expressed regret: "From the beginning, I felt your intentions were admirable, and I still do. It is unfortunate for all that the project will be halted."

You almost could see it coming. At a Kennedy Center gala in December, covered by the fashion magazine W, Catherine Reynolds made a point of inviting Martha Stewart as her guest and posing with her for a photo. The picture was an in-your-face gesture, flipped straight at her critics.

"This one," she said, "is for the Smithsonian."

ENDANGERED ANIMALS AND STAFF

IN EARLY APRIL OF 2001, IN THE FOOT-hills of the Blue Ridge Mountains near Front Royal, the natural landscape was showing the usual optimistic signs of renewal. Native species of animals and plants--white-tailed deer, black bears, red foxes, Kentucky warblers, wildflowers, white oaks, and maples--were making the transition from winter to spring. But there also were species wandering the hillsides that belonged thousands of miles away--scimitar-honed oryx from North Africa, red-crowned cranes from Japan, clouded leopards from South Asia, maned wolves from Brazil--dropped down in this unlikely place by the Smithsonian.

For 25 years the Smithsonian had operated a 3,200-acre preserve here called the Conservation & Research Center, an adjunct of the National Zoo, where it studied and bred endangered species. Dillon Ripley had started it, claiming surplus land that had been used over the years to keep US Army cavalry horses, house German and Italian war prisoners, and conduct research on cattle. The center enjoyed an international reputation among conservationists, having done pioneering research on reproductive biology, monitored declining animal populations throughout the world, introduced species back into the wild, and trained scientists, conservationists, and zoo personnel. The golden lion tamarin, Przewalski's horse, black-footed ferret, Arabian oryx, and Bali myna all owed something to the center, and it had enjoyed much praise.

Unbeknown to the staff at the CRC, this was one Appalachian spring that would not unfold in its normally glorious way. On April 4, Lucy Spelman, the new director of the National Zoo, drove out from Washington and announced that a decision had been made to close the center, transferring some of its animals and 70 staff members back to the zoo near Rock Creek Park and getting rid of the rest. The land would be returned to the General Services Administration. The closure, Spelman said, was included in the Smithsonian's budget request to Congress, due the following week, and already had been approved at the highest levels.

Spelman spoke briefly, then departed, leaving CRC's staff in shock. Nobody had seen it coming.

Small and his undersecretary for science, J. Dennis O'Connor, had been knocking around the closing as an option for months. Small raised it as a possibility in an interview with at least one candidate for the zoo directorship that eventually went to Spelman. Both men insisted it was not intended as a retreat from conservation activities. It represented only a "change in venue," from Front Royal to the zoo, as well as an attempt to use the savings on other research and to avoid the cost of maintaining a big plot of land with a backlog of needed repairs on nearly 100 buildings.

CRC was not the only casualty of the Smithsonian's proposed budget. Among other units slated for closing was its Center for Materials Research and Education, which studied ways of preserving delicate paper, paint, pottery, wood, and other museum artifacts.

But the Front Royal closure was the bombshell, and the shock was accompanied by anger. Some of it was directed at Spelman, who was blamed for not protecting the center from Small and O'Connor. Indeed, the two men were accused of choosing her as the new director--a veterinarian at the zoo, in her mid-thirties, with little administrative experience--because she was compliant and lacked the bureaucratic savvy to resist the drift of power toward the Castle.

It had not helped her reputation among the zoo's scientists when she'd put out an obsequious memo months earlier describing how she became O'Connor and Small's surprising choice as director--a last-minute development that bypassed two more-experienced finalists put forward by the zoo's search committee. Spelman said she had come to their attention for her recognition that there was "incredible fundraising potential" in allowing prospective donors to witness procedures on anesthetized animals. After an annual exam and dental work on a Kodiak bear, O'Connor asked if she'd be interested in the directorship; she met soon afterward with Small to hear his "fantastic" ideas for the zoo, and the job was hers.

There was determination at CRC to fight. Frank Wolf, the Republican congressman representing Front Royal, was alerted, and he drove out to meet with the staff, who gave him a standing ovation when he decried the shutdown. Wolf took it with the seriousness of a military-base closing. He held a meeting on Capitol Hill attended by top conservation groups, and e-mails were soon dispatched to CRC allies around the globe asking for letters of support. Among the first to respond were the daughters of Dillon Ripley.

THE CLOSING OF THE CRC WAS PART OF a broader initiative by Small to reorganize the scientific research activities that had always been a big part of the Smithsonian. It employed more than 400 researchers in dozens of disciplines; field work was conducted on every continent, including Antarctica. In Washington, the largest number of Smithsonian scientists was at the Museum of Natural History, whose encyclopedic collections of everything from fossils and meteorites to bird eggs, seashells, and insects are the most comprehensive in the world.

The Smithsonian also had major science centers outside Washington. Besides the CRC, the three largest were the Smithsonian Astrophysical Observatory, a joint venture with Harvard that was based in Cambridge but operated telescopes in Arizona and Hawaii and managed an orbiting x-ray observatory for the National Aeronautics and Space Administration; the Smithsonian Tropical Research Institute, headquartered in Panama and devoted to research on tropical rain forests, coral reefs, and other subjects; and the Smithsonian Environmental Research Center, which studied the Chesapeake Bay from a site in Edgewater, Maryland.

None entertained millions of visitors like the Smithsonian's museums, but they were part of a legacy in which science was at the core of its mission. James Smithson had been a geologist, and it was no accident that all of the institution's first nine secretaries were scientists.

Several times in the 1990s, panels of outside experts, mostly scientists from universities, had been brought in to assess the strengths and weakness of the scientific units. Larry Small read all those reports before taking charge, and another one on the Museum of Natural History landed on his desk the day he was inaugurated. The highest marks went to some of the centers outside Washington. The astrophysical laboratory in Cambridge and the tropical research institute in Panama were considered among the best in the world.

The outside experts were most critical of the Museum of Natural History. They acknowledged that the museum had many strengths, including its collections and pockets of quality in certain disciplines, with dedicated scientists who continued to publish in world-class journals. But they also offered a list of shortcomings: a significant loss of scientists due to a declining budget; an aging staff; a lack of creative leadership; and isolation from the great research questions of the day.

THE MAN SMALL PUT IN CHARGE OF developing a plan to reorganize the science enterprise was the undersecretary for science, Dennis O'Connor, a biologist and former University of Pittsburgh chancellor. Several themes emerged in the thinking that came out of their offices.

There was to be a new organization chart. Scientists at Natural History no longer would be under the direct control of the museum's director. Exhibits would be done with less input from the scientists and more from design experts. Most threatening of all: The Smithsonian would concentrate on selected "centers of excellence" and kill off some areas where it could not make a world-class contribution. The Smithsonian did not have the money to be a "smorgasbord" of all things to all people, Small said, suggesting that fewer than ten disciplines be retained.

It was a little like a company deciding to focus on its "core businesses" or a hospital deciding to specialize in heart transplants, but there were other subtleties as well. Small and O'Connor were convinced they needed to raise millions of dollars from the private sector for Smithsonian science and that they faced what O'Connor calls "a marketing problem." Science needed to be more visible, organized in a way that was more saleable, and focused on a few hot fields--astrophysics and marine science were two--that might appeal to donors.

This was not good news at Natural History. Many scientists there had spent their lives in specialities that involved combing through collections to sort out the structure of the natural world, the kind of nonglamorous background science that others depended on. A bitter feeling soon developed that the new secretary did not appreciate their work, and by the early months of 2001 the level of animosity toward O'Connor and Small at Natural History matched that at the CRC.

"We've gone from an ornithologist [Ripley] and spiraled downward to a lawyer [Heyman] and then to a banker [Small]," said one scientist with 30 years at Natural History. "It's impossible to go any lower."

THE SCIENTISTS OF THE SMITHSONIAN proved adept at guerrilla warfare against Small, using press leaks and other tactics that he had rarely encountered at Citibank or Fannie Mae. "The Smithsonian is an extremely public place, so things get a vast amount of coverage," he says. "Because our employees are Washington employees, they can make known the slightest things to reporters they have known for years. Reporters thrive on conflict and contention, so things get in the paper."

Small's office and the regents got hundreds of letters of protest about the CRC shutdown from congressmen, scientific groups, conservation organizations, and scientists. Robert Fri, director of Natural History for five years, resigned with a terse statement saying he was unwilling to support Small's reorganization plans. A California businessman dispatched a scathing letter withdrawing a $400,000 pledge: "Because of my considerable disappointment in the secretary and his various actions, I am canceling my gift. Sue me!"

Press coverage of the issue kept Small on the defensive, and there was one article on the Washington Post's op-ed page that especially encouraged Small's antagonists. It was written by Maxine Singer, a biochemist who is president of the Carnegie Institution of Washington and who'd chaired a blue-ribbon Commission on the Future of the Smithsonian in the mid-1990s. Singer noted the evaluations that some Smithsonian science did "not measure up" and praised Small for seeking change, but she suggested that his approach had so "angered and threatened" the staff that he had "decreased the chance for constructive renewal." She was critical too of limiting the autonomy of scientific units, which made it difficult to attract creative leaders.

Some of the criticism was less polite. DUMP SMALL stickers appeared on bulletin boards, and someone slapped one on the car of John Dailey, the director of Air and Space. Pages from a biography of Walter Wriston, the former head of Citibank, were circulated, highlighting comments critical of Small's managerial abilities and describing his eventual demotion. Newspaper clippings criticizing Dennis O'Connor's tenure as chancellor at the University of Pittsburgh also made the rounds.

Someone leaked the fact that Small had spent $14,600 to charter an executive jet for a trip to San Antonio, where he'd attended a ceremony at an affiliated museum and received a Golden Plate Award from the academy run by Wayne Reynolds. After questions about the expenditure came up in the press, Small's PR person insisted the money would come from the secretary's own pocket.

An anonymous Web site appeared, featuring comments that put Small in a bad light. One told of his voicing doubt about the seriousness of deforestation in the Amazon because he'd seen so many trees during flights over the region--something at odds with conventional wisdom on the subject. Finally, he issued a clarifying statement saying that he appreciated the seriousness of the losses and was only trying to say that exaggeration of the problem damaged the credibility of environmentalists.

Small's critics also were pleased when a Hearst reporter discovered that the US Fish and Wildlife Service was investigating the secretary's private collection of Amazonian tribal art. Among the collection's 1,000 items were elaborate headdresses, masks, and other artifacts incorporating the feathers of exotic birds, and investigators wanted to know whether any of them were from endangered species, which are illegal to trade.

Small told investigators he had bought most of the collection from a private dealer in 1998 and provided import permits and written assurances that the items were in compliance with endangered-species laws. The agency initially closed its investigation but reopened it a few months later after examining photographs of some of the featehred artifacts from a story on the secretary in the Smithsonian magazine. The case remains open.

SOME OF THE MOST PREDICTABLE resistance to the proposed closing of the Front Royal conservation center came from Capitol Hill. Frank Wolf led the way, with Senator John Warner close behind. Wolf, an 11-term congressman known for protecting his district, was a senior member of the House Appropriations Committee that approved the Smithsonian's budget. He was livid, firing off a letter to Small characterizing CRC as "a crown jewel" and saying he was "deeply troubled" by "a monumental mistake."

This reaction was not anticipated by anyone in the Smithsonian's top ranks. Nobody raised a red flag--not Small, not O'Connor, not Sheila Burke, the former Dole aide who oversaw congressional relations. But nobody doubted, in retrospect, that the failure to lay some groundwork with Frank Wolf had been a blunder.

In the end, Small withdrew his plan to close CRC, though he put the best face on the backpedaling. There was a "false perception" that the original decision represented a retreat from the biological sciences, he said, when it was really an attempt to save the cost of managing such a big facility and plow it back into research. Just to be sure, Wolf inserted language into the appropriations bill ordering the Smithsonian to keep its hands off the center. Maryland's senators, Paul Sarbanes and Barbara Mikulski, got a similar deal keeping alive the Center for Materials Research and Education, which is based in suburban Suitland.

While that preserves the status quo for the time being, the eventual fate of the CRC may depend on results from a blue-ribbon commission looking at the entire scientific enterprise. The regents created the 18-member commission in the midst of all the turmoil as a way of cooling things off and making sure that everyone--from the scientists to Small--would be heard. It's headed by Jeremy Sabloff, director of the University of Pennsylvania Museum of Archaeology and Anthropology.

The panel is not expected to report until later this year, but the Smithsonian has dodged one bullet aimed at its science enterprise. The Bush administration's Office of Management and Budget, in some preliminary work on the Smithsonian's budget for 2003, proposed stripping it of three of its best scientific units--the astrophysical lab, the tropical research center, and the Chesapeake Bay research center--and transferring them to the National Science Foundation. After protests from the Smithsonian, the idea did not make it into the President's budget. Another OMB threat--to delay renovation of the art museums in the Old Patent Office--also was withdrawn.

AMONG SMITHSONIAN STAFF MEMBERS there is much anger directed at the Board of Regents for picking a man of Larry Small's background, management style, and temperament to run the institution. These critics want him fired, and they were delighted when a recent New York Times editorial said there was "reason to question his leadership."

But there appears little chance Small will be dismissed. All but a handful of the 17 regents remain in his corner. "They wanted a businessman, and that's what they got," says one insider. "He's doing exactly what they intended."

In one indication of their approval, they have raised his salary twice in two years, from $330,000 to $502,896--more than twice what Mike Heyman made. At their closed meeting in late January, they also showered him with praise and gave him a rousing round of applause.

Small still has a full agenda. The appropriate scope of scientific research is but one of the issues facing him as he attempts to recover from two years of getting his fingers singed. Other big questions likely to determine his own reputation and the future of the Smithsonian remain unanswered:

Can he find the right balance between the crisp practices of modern business and the looser traditions of a quasi-academic institution?

Can he negotiate the ideological warfare that may arise again over how Smithsonian exhibits tell the American story?

Can he lead an institution where he has alienated so many members of the staff?

Where is he headed in ensuring that the Smithsonian meets its obligations both to serious scholarship and to memorable exhibits that appeal to popular taste?

At a time when the federal budget is tight, can he get the money out of the administration and Congress to repair the Smithsonian's decaying buildings?

Given the decline in the stock market, can he find enough of those donors that all institutions seek--people who are willing to write checks for $100 million, receive the plaudits of a grateful nation, then have the good manners to walk away? *